The Financial Stability Board (FSB) recently published its Interim Report on the Lessons Learnt from the COVID-19 Pandemic from a Financial Stability Perspective. The report identifies preliminary lessons for financial stability and aspects of the functioning of the G20 financial reforms that may warrant attention at the international level. The COVID-19 pandemic is the first major test of the global financial system since the G20 reforms were put in place following the financial crisis of 2008. Thus far, the financial system has weathered the pandemic thanks to greater resilience, supported by the G20 reforms, and the swift, determined and bold international policy response. Continue reading…

by Michael Edesess

Nassim Nicholas Taleb doesn’t mince words. When he thinks that something is worthless, he says so. In a recent paper he says in no uncertain terms that bitcoin is worthless. However, those “uncertain terms” are not only in mathematical language but in Taleb-speak. They need some explanation and interpretation. I will provide it in this brief article. In a new paper, “Bitcoin, Currencies, and Fragility,” Taleb aims a scattergun at bitcoin and its underlying database technology, blockchain. Some of those scattershots merely ding bitcoin or blockchain only slightly, or not at all. But some of them hit the mark squarely. Continue reading…

Nikhil Rathi, Chief Executive of the Financial Conduct Authority (FCA), recently delivered a speech at the launch of the FCA’s Business Plan. When I became CEO last October, I joined a purposeful organisation. Our people working round the clock with great energy and to great effect to stand up for consumers and businesses affected by the pandemic. Almost five million payment deferrals granted across credit cards, loans and mortgages to people who had suddenly little or no money coming in. Businesses forced to close or scale back operations won insurance payments of more than three-quarters of a billion pounds for COVID-related losses thanks to our efforts in the Supreme Court. And all the while, the global markets we oversee proved resilient at a time of unique stress and volatility – laying the foundations for record capital raising this year to support economic recovery. Continue reading…

The Governing Council of the European Central Bank (ECB) recently decided to launch the investigation phase of a digital euro project. Following the decision, the President of the Eurogroup Paschal Donohoe joined the meeting, congratulated the Governing Council and expressed his full support for the project. “It has been nine months since we published our report on a digital euro. In that time, we have carried out further analysis, sought input from citizens and professionals, and conducted some experiments, with encouraging results. All of this has led us to decide to move up a gear and start the digital euro project”, says ECB President Christine Lagarde. “Our work aims to ensure that in the digital age citizens and firms continue to have access to the safest form of money, central bank money”. Continue reading…

Takedown of DoubleVPN makes it harder for criminal hackers to cover their tracks. This week, law enforcement and judicial authorities in Europe, the US and Canada have seized the web domains and server infrastructure of DoubleVPN. This is a virtual private network (VPN) service which provided a safe haven for cybercriminals to attack their victims. This coordinated takedown, led by the Dutch National Police (Politie), under jurisdiction of the National Public Prosecutor’s Office (Landelijk Parket), with international activity coordinated by Europol and Eurojust, has now ended the availability of this service.  Continue reading…

This fine was for making unsolicited telemarketing calls to people who registered not to receive this type of sales call, where the firm had no evidence they had consented to receive the call or where the firm was unable to confirm what consent had been obtained on customer data purchased from third party data providers. Continue reading…

The FCA has launched a consultation on a series of proposed reforms to improve the effectiveness of UK primary markets, alongside a discussion of how it might continue to develop the regime to ensure the UK remains a competitive and dynamic market. Recently, both the UK Listing Review, chaired by Lord Jonathan Hill, and the Kalifa Review of UK FinTech have made specific recommendations for improvements to the regime. The FCA’s suggested reforms seek to address, and build, on the proposals in these important reviews to ensure that the UK remains an attractive place to grow and list successful companies. Continue reading…

Members of the Organization for Economic Co-operation and Development (OECD) / G20 / Inclusive Framework worked on a global consensus-based solution to reform the international corporate tax framework. The discussion focused on two broad work streams: Pillar One, the partial re-allocation of taxing rights, and Pillar Two, the minimum effective taxation of profits of Multinational Enterprises (MNEs). Pillar One aims to adapt the international rules on how the taxation of corporate profits of the largest and most profitable MNEs is shared amongst countries, to reflect the changing nature of business models, including the ability of companies to do business without a physical presence. Pillar Two will set a floor to excessive tax competition. It aims to ensure that multinational businesses are subject to a minimum effective level of tax on all of their profits each year.
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FCA, PRA and Bank of England set out plan to improve diversity and inclusion in regulated firms. The FCA, Prudential Regulation Authority (PRA) and Bank of England (the regulators) are seeking views on regulatory plans to improve diversity and inclusion in financial services. In a discussion paper, the regulators have set out policy options including, among others, the use of targets for representation, measures to make senior leaders directly accountable for diversity and inclusion in their firms, linking remuneration to diversity and inclusion metrics and the regulators’ approach to considering diversity and inclusion in non-financial misconduct. The discussion paper also focuses on the importance of data and disclosure in order to enable firms, regulators and other stakeholders to monitor progress.   Continue reading…

On June 2, 2021 the OFAC sanctioned three Bulgarian individuals for their extensive roles in corruption in Bulgaria, as well as their business networks encompassing 64 entities. This constituted the largest Global Magnitsky action taken on a single day in the history of the program. By applying their laws extraterritorially, the United States seeks to police and prevent serious human rights abuses and large-scale corruption. By imposing tangible and significant consequences on perpetrators’ property and interests, the US protects not only its interests, but also the global financial system. At the same time, designated sanctions raise many questions when it comes to legality, justice and compliance, especially when it comes to local markets and smaller businesses.
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